Room shortage troubles Myanmar

YANGON, 25 March 2013: Myanmar is running short of hotel rooms to meet growing demand mainly from regional visitors who are travelling beyond Yangon to visit Bagan and Mandalay.

Experts warn the wave of tourism and business related visit, could damage the country’s long-term aspirations as hotel rates rise to reduce competitiveness.

For the first time in the country’s history, tourist arrivals shot past the 1 million mark in 2012. The boom continues on the back of growing investment interest, but the country can only muster 27,000 hotel rooms in all categories across the entire nation. In contrast, Bangkok has at least 42,000 registered rooms and estimates put the figure closer to 70,000 when all available rooms including non-registered hotels and apartment blocks renting rooms by the day are included.

Since the country embarked on a path to democracy, in late 2011, hotel rates in Yangon have jumped 300% or more.

Travel companies complain they are facing skyrocketing hotel room rates at every tourist destination, nationwide, while the actual services and facilities are not up to standard.

“Hotels are really greedy. They charge US$150 a night for a room that’s worth only US$40…complaints from travellers about poor facilities are increasing, causing potential damage to the image of the country,” an unnamed travel company spokesperson reported to the local news.

The complaints reflect the constant bickering between hotels and travel agencies that is an intrinsic part of their business relationship. Yet in the case of Yangon the agents have a genuine beef. Rates did skyrocket from as low as US$25 to as high as US$300, but it was mainly driven by a surge of business travellers keen to touch base with the new government.

Outside of Yangon the top rate is still around US$100 and most rooms are selling in the US$40 to US$70 bracket.

Given a year, the environment will settle, investors will know the business terms and opportunities, or lack of them, leading to a more realistic travel trend in Yangon.

The trick is to move the tourists from the commercial capital as fast as possible to explore the country’s major heritage and cultural sights. Some agents are cutting stays in Yangon to a single night.

Experts relate to today’s problems especially getting tourists to the key attractions outside of Yangon and providing them with adequate accommodation.

“There are eight guest houses that can upgrade but that will give us just 50 more rooms this year. Bagan has about 2,500 rooms in 80 hotels,” he said.

Hotels in Bagan are reaching an occupancy of 75% and if that statistic is accurate there are rooms available.

“This month we received between 600 and 1,000 arrivals a day. We can handle that, but if the numbers increases further we will definitely need more rooms,” said a spokesperson for Kaytumadi Hotel in Bagan.

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